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Stopping the fraud and abuse from Michigan’s auto insurance companies

May 20, 2011 by Steven M. Gursten

No-Fault insurance lawyer explains how car insurance companies get away with insurance abuse, and asks for laws to stop insurance bad faith and fraud in Michigan

If you’ve read my list of the worst auto insurance companies, you can surely see that some serious action needs to occur now – in order to regulate how these insurance companies are treating their own customers.

As a No-Fault insurance lawyer, I know that insurance companies treat people worse in Michigan than in most other states. If you’ve been injured in an auto accident, chances are you will experience the three D’s from an auto insurance company when handling your claim. The insurance company will usually:

1. Delay your insurance benefits,

2. Deny you were injured in an auto accident, and then

3. Defend aggressively, to get people to avoid hiring an insurance lawyer and to accept a compromised settlement.

No bad faith laws or punitive damages in Michigan

This happens because Michigan has no bad faith laws and no punitive damages to deter insurance companies from abusing their people like this.

Bad faith laws are laws that prohibit insurance companies from treating you unfairly and illegally. Bad faith is defined as an intentional dishonest act by not fulfilling legal or contractual obligations, misleading another, entering into an agreement without the intention or means to fulfill it, or violating basic standards of honesty in dealing with others. Hey auto insurance companies, does this sound familiar?!

Punitive damages are additional damages that a judge or jury can award when an insurance company acts with recklessness, malice or deceit. Michigan law does not allow judges or juries to award punitive damages in car accident cases or any personal injury lawsuits for that matter. So insurance company defendants have no problem forcing legitimate cases to trial. Even if they lose, all they have to pay is the insurance policy limits. (This also means we have more “grasshoppers” – truckers who have caused so many truck accidents that they can’t get jobs in states with punitive damages, so they come here.)

Michigan’s pathetic Consumer Protection Act for insurance companies

For those of you who are unfamiliar, consumer protection laws are supposed prevent businesses from engaging in fraud or certain unfair practices and to protect consumers in the marketplace.

Unfortunately, this means nothing in Michigan, where insurance lawyers – incredibly – cannot even use the Michigan Consumer Protection Act in claims against auto insurance companies. The result is that once again, Michigan insurance company claims adjusters can treat people terribly and largely get away with it.

Michigan insurance companies already lead the nation in profitability, and Michigan is one of the few states without an insurance commissioner who can regulate how much profit these insurance companies can make; even though as residents, we are all required by law to purchase No-Fault insurance.

What you can do to ensure more fair auto insurance rates and protections

On a macroeconomic level, this all works out quite well for our auto insurance companies. Why? Auto accident victims in Michigan have been walking away from hundreds of millions of dollars in valid and deserving claims that No-Fault insurance companies are legally required to pay. Many of these auto insurance companies believe you won’t wait, you won’t hire a No-Fault insurance lawyer to file an auto accident lawsuit, and you will eventually become so fed up or worn down by the claims adjuster that you will walk away or take a low-ball offer.

Some of the auto insurance companies on my list are the worst offenders.

These episodes scream out why Michigan must have bad faith insurance laws and punitive damages to deter such bad behavior. Without a “big stick” that can halt deliberate insurance company abuse, our auto insurance companies can get away with dishonest actions more than insurance companies in almost all other states.

What Michigan consumers can do to help

Here’s what you can do to help:

Please write a letter to your local representative and ask that bad faith insurance laws be introduced in Michigan against insurance companies.

Call for punitive damages when insurance companies and others intentionally and recklessly cause injury, in order to stop them from doing it to others.

Do you have an insurance company horror story? Share it by making a comment below, or on our Facebook page. Let’s not let these insurance companies get away with abusing our cherished Michigan families!

If you have questions about your auto insurance policy, or if you’ve been in an auto accident and your insurance company is mistreating you, feel free to call (248) 353-7575 to speak with one of our No-Fault lawyers. There is no cost or no obligation.

Steven M. Gursten is head of Michigan Auto Law. He is recognized as one of the nation’s top lawyers handling serious car and truck accident injury cases and automobile insurance No-Fault litigation. Michigan Auto Law has received the highest jury verdict for a car accident or truck accident in seven of the last 10 years. Steven is available for comment regarding Michigan No-Fault law and insurance company abuse.

Additional resources to protect yourself:

Your Michigan No-Fault insurance benefits

Tips for choosing the best insurer

Top 4 Best Auto Insurance Companies – 2011

Top 10 Worst Insurance Companies – 2008

Michigan Auto Law is the largest law firm exclusively handling car accident, truck accident, motorcycle accident and No-Fault insurance lawsuits throughout the entire state. We have offices in Farmington Hills, Detroit, Ann Arbor, Grand Rapids and Sterling Heights to better serve you.

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